It’s possible that I shall make an ass of myself. But in that case one can always get out of it with a little dialectic. I have, of course, so worded my proposition as to be right either way (K.Marx, Letter to F.Engels on the Indian Mutiny)
Sunday, June 11, 2023
U.S. tells UNESCO it has decided to rejoin agency Trump quit
A general view of the UNESCO meeting in November 2019 in Paris. Photo: Mustafa Yalcin/Anadolu Agency via Getty Images
The U.S. last week privately notified the UN Educational, Scientific and Cultural Organization (UNESCO) that it has decided to rejoin the agency nearly six years after the Trump administration announced it was withdrawing U.S. membership, a State Department spokesperson told Axios.
Why it matters: Rejoining UNESCO is one of the Biden administration's foreign policy goals — mainly in an effort to counter what it sees as the growing influence of the Chinese government on the UN agency's agenda.
Catch up quick: After Palestine became a full member of UNESCO in 2011, the Obama administration stopped providing funding to the organization because it was barred to do so by U.S. law.
In October 2017, the Trump administration announced it was leaving UNESCO over what it described as anti-Israel bias. Israel announced that it would leave the organization not long after.
In February 2022, the Israeli government notified the State Department that it wouldn’t oppose a U.S. return to UNESCO. The Israeli position paved the way for some Democrats and Republicans in Congress to support the move.
Last December, Congress approved a bill that allocated more than $500 million needed to pay the U.S. debt to UNESCO and allows it to return as a full member.
The legislation includes a snap-back clause that states that if the Palestinians obtain a member-state status in a UN agency, the U.S. will stop its funding again.
The bill will sunset on Sept. 30, 2025, when the current director general of UNESCO leaves office but could be extended further by Congress.
Driving the news: Richard Verma, the deputy secretary of state for management and resources, delivered a letter to UNESCO Director-General Audrey Azoulay on June 8, proposing a plan for the U.S. to rejoin the organization, a State Department spokesperson said.
The plan, which is a result of long negotiations between the State Department and UNESCO, lays out a timetable for paying the U.S. debt and for being readmitted to the agency’s executive board, a source briefed on the plan said.
Behind the scenes: The office of UNESCO’s director general last Friday called the ambassadors of all member states to an extraordinary meeting scheduled for Monday, during which Azoulay “will provide urgent strategic information," according to an email obtained by Axios.
A source briefed on the issue said Azoulay called the meeting to brief member states on the U.S. plan to rejoin UNESCO and to ask for their agreement to hold a special general conference meeting in July to welcome the U.S. decision and approve the rejoining plan.
“Any such action (rejoining UNESCO) would require concurrence by UNESCO’s current membership," the State Department spokesperson said.
UNESCO did not respond to a request for comment.
What to watch: The U.S. wants to rejoin UNESCO and begin paying its debts now so that it could run for a seat on UNESCO’s executive board in the upcoming elections in November, a source briefed on the issues said.
A source briefed on the issue said the group of Western countries in UNESCO already agreed to hold a seat for the U.S. in case it decides to rejoin.
Petition of former child combatants against Dahal and Bhattarai registered at Supreme Court
Petitioners claim that the Maoist leaders had committed war crimes by recruiting minors in the armed conflict.
A petition has been registered at the Supreme Court on Sunday demanding the prosecution of Prime Minister Pushpa Kamal Dahal, the then Maoist supreme commander, and former prime minister Baburam Bhattarai, the then second-in-command of the Maoist party.
Nine former child combatants led by Lenin Bista, the founding chair of the Discharged People’s Liberation Army, registered the petition stating that they were forced by Maoists to be part of military activities against the laws of international human rights. The petitioners have claimed that the Maoist leaders had committed war crimes by recruiting minors in the armed conflict.
The court will conduct a preliminary hearing on the case on Tuesday.
Revoking previous week’s decision of the apex court administration to scrap a writ petition of former child Maoist combatants, a single bench of Justice Anand Mohan Bhattarai on Friday ordered the court staffers to register the petition that demands the prosecution of Dahal and Bhattarai.
The court administration on May 30 had refused to register the petition arguing that the case will be settled through the transitional justice mechanisms that are overseeing conflict-era cases.
During the verification process for army integration conducted by UNMIN in 2007, thousands of Maoist fighters, including Bista, had been disqualified for being minors.
Among the 4,008 combatants who did not qualify for integration, 2,973 were verified as minors while the remaining 1,035 had joined the Maoist ‘People’s Liberation Army’ after the first ceasefire of May 26, 2006 — six months before the peace deal was signed.
The government had provided between Rs500,000 and Rs800,000 each to the combatants who chose voluntary retirement. However, those disqualified didn’t get any substantial support, except for a few thousand rupees from the United Nations.
Ukraine invasion ‘gift’ to West by Vladimir Putin, Belarus president says.
Belarus president Lukashenko said, “Let's face it: we gave them [the West] a gift.”
Belarusian president Alexander Lukashenko said that Russia's invasion of Ukraine should be perceived as a "gift" to the West. One of Russian president Vladimir Putin's most trusted allies, Lukashenko said, "Let's face it: we gave them [the West] a gift when we got bogged down in Ukraine."
Russian president Vladimir Putin and Belarusian president Alexander Lukashenko speak.(AP)
“This is, of course, a gift to them. And here they started clinging to it to bring our space to its knees," the Belarusian president added. Artyom Shraibman, Belarusian political analyst and founder of Sense Analytics consultancy told Newsweek that he believes Lukashenko's reference to the "gift" is an acknowledgement that the unity of Western forces has caused Russia and Belarus to spend more resources on the war.
"In his mind it's basically the West finding the way to help Russia fail without fighting it directly," Artyom Shraibman said. The Belarusian president was likely already too attached to Vladimir Putin to be able to make any other determination than to fight alongside him, the analyst said.
Mikhail Troitskiy, professor of practice at the University of Wisconsin-Madison, told Newsweek, “His point was rather that before starting the war, Russia and Belarus—and personally Putin, and Lukashenko as a mediator—exhausted all peaceful options to ensure their own security in the face of the western onslaught on China (via Belarus, Russia and Eurasia).”
“Lukashenko puts the blame for the full-scale invasion of Ukraine on the rigidity of the Ukrainian and western positions since 2014. He stresses that Ukraine was cheating when it signed the Minsk agreements that Lukashenko supposedly helped broker. [The fact that] Russia got stuck in Ukraine is just one problem that the West rushed to exploit mercilessly, according to Lukashenko," he added.
How teenager’s ‘survival games’ kept her siblings alive in Colombian jungle for 40 days
Before the crash, the teenager and nine-year-old would frequently play a game setting up ‘little camps’
A 13-year-old girl used “survival games” to keep her and her siblings – including a baby – alive in the Amazon Rainforest for 40 days, her family have revealed.
It killed everyone else onboard – including the children’s mother Magdalena Mucutui Valencia.
With no outside help, Lesly and Soleiny resorted to using their knowledge of the jungle to survive, their aunt Damarys Mucutuy said.
Speaking to the Caracol news network, she said the teenager and nine-year-old would frequently play a game setting up “little camps” before the disaster.
She translated this after the crash and used hair ribbons to make camps and keep her younger brothers safe in the jungle which is home to predators including jaguars, pumas, and snakes.
The area is also used by armed gangs that smuggle drugs.
In pictures released by the Colombian military after they were rescued, hair ties can be seen among branches on the jungle floor.
(Aeronáutica Civil de Colombia)
In addition to making a camp, Lesly “knew what fruits she can’t eat because there are many poisonous fruits in the forest. And she knew how to take care of a baby”, her grandmother Fatima Valencia explained.
Mrs Valencia added that Lesly’s experience looking after her siblings while her mother was at work also helped.
The children’s grandfather Fidencio Valencia said they were “very weak” but “happy to see their family”.
(AFP via Getty Images)
It is thought that this knowledge, combined with food they managed to salvage from the plane’s wreckage and other skills learned growing up in the Huitoto indigenous group, helped the children survive for such a long period.
“She gave them flour and cassava bread, any fruit in the bush, they know what they must consume,” she told the BBC.
“They were raised by their grandmother,’ said John Moreno, a leader of the Guanano group in Vaupes, in the southeastern part of Colombia where the children were raised.
“They used what they learned in the community, relied on their ancestral knowledge in order to survive.”
The children have since been taken to a military hospital to recover
(Copyright 2023 The Associated Press. All rights reserved)
Speaking after they were found, their grandfather Fidencio Valencia said they were “very weak” but “happy to see their family”.
Ms Mucutuy told a local radio station that “the children are fine” despite being found with signs of dehydration and insect bites and have been offered mental health services.
They are currently being cared for at a military hospital in the capital, Bogota.
Friday’s announcement came after weeks of searching for the children by authorities in the South American country.
President Gustavo Petro called them an “example of survival” and predicted their saga “will remain in history”.
One of the four Indigenous children who were found alive after being lost for 40 days in the Colombian Amazon forest following a plane crash, is stretchered out of a plane upon landing at the CATAM military base in Bogota on June 10, 2023
(AFP via Getty Images)
The manhunt was sparked after their children’s bodies were not found alongside the plane’s wreckage which was discovered between 15 May and 16 May.
Around 200 soldiers and indigenous people who knew the area were later dispatched to comb through some 320 sq km (124 sq mi) of the jungle.
It is thought that at points they came with 100m (300ft) of them, but storms, thick vegetation, and marshy terrain prevented them from making contact.
The air force also dropped food parcels and 10,000 flyers telling them to stay put and giving them survival tips.
Paramedics carry to an ambulance one of four Indigenous children who were missing after a deadly plane crash at the military air base in Bogota, Colombia, Saturday, June 10, 2023
(AP)
After being found, army radios could be heard saying: “Miracle, miracle, miracle, miracle.”
Defense Minister Ivan Velasquez has since paid tribute to the various army units' “unshakeable and tireless” work, as well as to the Indigenous people who took part in the search.
Following the children being found, footage showed how the dehydrated and malnourished children were lifted into a helicopter.
“I never lost hope, I was always supporting the search. I feel very happy, I thank President Petro and my ‘countrymen’ who went through so many difficulties,” the grandmother said.
The children were treated by Special Operations Command medics before they were flown to a hospital. They were flown to the military base of San Jose del Guaviare, according to the Daily Mail.
Colombia's First Lady Veronica Alcocer (L) and Sofia Petro (R), daughter of Colombian President Gustavo Petro, visiting one of the four Indigenous children
(Colombian Presidency/AFP via Get)
Family fleeing threats from crime groups
Days into the initial search Mr Petro announced that the minors had been located and were in good health. But hours later, he walked back that assertion, clarifying that the Air Force and indigenous communities had established contact with the children, but that their location remained unknown.
Ms Mucutuy was travelling with her children to Bogotá to meet her husband Manuel Ranoque and start a new life together.
According to El Tiempo, Mr Ranoque, who is related to a local political leader, previously lived in the indigenous reserve of Puerto Sábalo with his family.
He had to flee the community on foot after receiving threats from crime groups operating in the area. Mr Ranoque completed his odyssey through the jungle and eventually arrived in Bogotá.
He reportedly found a job and saved money for a month and a half to afford his family’s transport from their remote community to the Colombian capital.
The search for the children has captivated Colombia during the 40 days since they vanished after surviving the crash.
Members of the Colombian Army checking one of the four Indigenous children who were found alive after being lost for 40 days in the Colombian Amazon rainforest
(Colombian Presidency/AFP via Get)
Plane suffers engine failure
On 1 May, the plane, which was carrying six passengers and the pilot, suffered an engine failure and declared an emergency. After the plane fell off the radar, the search for any survivors started.
The plane had been on a route between Araracuara in the Amazonas province and San Jose del Guaviare for the first leg of the trip when it disappeared.
The plane wasn’t found until two weeks later on 16 May in the rainforest, as weather conditions delayed search operations. The remains of the three adults on the plane were located, but the children weren’t there.
The Colombian armed forces flew 150 soldiers with dogs to the area to search for the siblings. Dozens of volunteers from Indigenous tribes also joined the search efforts.
As they searched in areas with low visibility because of the forest and mist, soldiers in helicopters dropped boxes of food into the jungle for the children to hopefully find.
‘She had been living in the jungle for so long’
Mucutuy’s mother Fátima told El Tiempo she was combing parts of the jungle herself with other members of indigenous communities.
“I’m waiting for them to return [my daughter’s] body. She had been living in the jungle for so long. I’m waiting for her,” Fátima said at the time. “God is good and I know the children will be found alive.”
Authorities said rescue efforts involved three helicopters, including one which blasted out a recorded message from the children’s grandmother in the Huitoto language telling them to stop moving through the jungle. At night, planes fired flares to help ground crews search.
Confusion as rumours emerges about children’s location
At one point, rumours emerged concerning the children’s location and Mr Petro tweeted on 18 May that they had been found but soon deleted the message, saying that he had been misinformed by one of the government agencies.
At the time, Mr Petro claimed in a statement on Twitter that the children had been found after a search by the military, firefighters, and civil aviation authority officials in the dense jungle of Colombia’s Caqueta province.
“After arduous searching by our military, we have found alive the four children who went missing after a plane crash in Guaviare. A joy for the country,” he said.
Mr Petro deleted his previous tweet, later issuing an apology: “I have decided to delete the tweet because the information provided by [the government’s child welfare agency, ICBF] could not be confirmed. I apologise for the confusion.
“The Military Forces and the indigenous communities will continue in their tireless search to give the country the news it is waiting for. At this time there is no other priority other than moving forward with the search until you find them. Children’s lives are the most important thing,” he said last month.
The Instituto Colombiano de Bienestar Familiar (ICBF) said previously that it had received information “from the field” that the children had been found in good health. However, defence ministry sources then told local media that they had no confirmation that they had been found.
“Information was received from the area assuring contact was made with the four children who were part of the group transported on the aircraft. This report stated that they had been found alive and in good health,” said a statement from the ICBF before the children were located.
“However, the military forces have not yet been able to establish official contact due to adverse weather conditions and difficult terrain,” the statement added. Authorities were not been able to “corroborate the information received by the ICBF from various sources”.
ICBF director Astrid Cáceres told Caracol Radio last month that the children were safe but that officials lost communication via satellite with them. However, Ms Cáceres said they had sent teams to three key areas where the children were believed to be, and she was “very confident” that they would soon be found.
The children were travelling with their mother from Araracuara, a village in the Amazon, to San Jose del Guaviare, a small city on the outskirts of the rainforest. The children are a part of the Huitoto people, with officials saying that the oldest siblings have a level of understanding of how to survive in the forest.
‘They are children of the jungle’
The president said on Friday following the finding of the children that for a time he thought that they had been rescued by one of the nomadic tribes that still travel through the jungle with little interaction with the authorities.
During the search, signs that the children were alive appeared, including footprints, a baby bottle, diapers, hair ties, children’s scissors, improvised shelters made with jungle vegetation, and fruit with what appeared to be human bite marks.
“The jungle saved them,” Mr Petro said, according to the AP. “They are children of the jungle, and now they are also children of Colombia.”
Cassava flour and fruit kept 4 children alive for 40 days after plane crash in Colombia's jungle
MANUEL RUEDA and REGINA GARCIA CANO
Associated Press Jun 10, 2023
BOGOTA, Colombia — Four Indigenous children survived an Amazon plane crash that killed three adults and then braved the jungle for 40 days before being found alive by Colombian soldiers, bringing a happy ending to a search-and-rescue saga that captivated a nation and forced the usually opposing military and Indigenous people to work together.
Military personnel unload from a plane one of four Indigenous children who were missing after a deadly plane crash, Saturday at the military air base in Bogota, Colombia.John Vizcaino, Associated Press
Cassava flour and some familiarity with the rainforest's fruits were key to the children's extraordinary survival in an area where snakes, mosquitoes and other animals abound. The members of the Huitoto people, ages 13, 9 and almost 5, are expected to remain for a minimum of two weeks at a hospital receiving treatment after their rescue Friday.
Family members, President Gustavo Petro as well as government and military officials met the children Saturday at the hospital in Bogota, the capital. Defense Minister Iván Velásquez told reporters the children were being rehydrated and cannot eat food yet.
“But in general, the condition of the children is acceptable,” Velásquez said. They were traveling with their mother from the Amazonian village of Araracuara to San Jose del Guaviare when the plane crashed in the early hours of May 1.
The Cessna single-engine propeller plane was carrying three adults and the four children when the pilot declared an emergency due to an engine failure. The small aircraft fell off the radar a short time later and a search for survivors began.
“When the plane crashed, they took out (of the wreckage) a fariña, and with that, they survived,” the children’s uncle, Fidencio Valencia told reporters outside the hospital. Fariña is a cassava flour that people eat in the Amazon region.
“After the fariña ran out, they began to eat seeds,” Valencia said. Timing was in the children's favor. Astrid Cáceres, head of the Colombian Institute of Family Welfare, said the youngsters were also able to eat fruit because “the jungle was in harvest.”
Soldiers and Indigenous men pose for a photo with the four Indigenous children who were missing after a deadly plane crash, Friday in the Solano jungle, Caqueta state, Colombia.Colombia's Armed Force Press Office via AP
An air force video released Friday showed a helicopter using lines to pull the youngsters up because it couldn’t land in the dense rainforest where they were found. The military on Friday tweeted pictures showing a group of soldiers and volunteers posing with the children, who were wrapped in thermal blankets. One of the soldiers held a bottle to the smallest child’s lips.
Gen. Pedro Sanchez, who was in charge of the rescue efforts, said that the children were found 3 miles away from the crash site in a small forest clearing. He said rescue teams had passed within 66 to 164 feet of where the children were found on a couple of occasions but had missed them.
“The minors were already very weak,” Sanchez said. “And surely their strength was only enough to breathe or reach a small fruit to feed themselves or drink a drop of water in the jungle.”
Petro called the children an “example of survival” and predicted their saga “will remain in history.”
Two weeks after the crash, on May 16, a search team found the plane in a thick patch of the rainforest and recovered the bodies of the three adults on board, but the small children were nowhere to be found.
Sensing that they could be alive, Colombia’s army stepped up the hunt and flew 150 soldiers with dogs into the area, where mist and thick foliage greatly limited visibility. Dozens of volunteers from Indigenous tribes also joined the search.
Soldiers on helicopters dropped boxes of food into the jungle, hoping that it would help sustain the children. Planes flying over the area fired flares to help search crews on the ground at night, and rescuers used speakers that blasted a message recorded by the siblings’ grandmother telling them to stay in one place.
The announcement of their rescue came shortly after President Gustavo Petro signed a cease-fire with representatives of the National Liberation Army rebel group. In line with his government's messaging highlighting his efforts to end internal conflicts, he stressed the joint work of the military and Indigenous communities to find the children.
“The meeting of knowledge: indigenous and military,” he tweeted. "Here is a different path for Colombia: I believe that this is the true path of Peace."
Damaris Mucutuy, an aunt of the children, told a radio station that “the children are fine” despite being dehydrated and with insect bites. She added that the children were offered mental health services.
Cáceres told reporters officials agreed with the children's relatives to allow for “spiritual work” at the jungle and the hospital “if there was no immediate emergency action” needed. She said musicians and musical instruments relevant to the children's culture will be allowed in the hospital.
Officials praised the courage of the eldest child, a girl, who they said had some knowledge of how to survive in the rainforest and led the children through the ordeal.
Before their rescue, rumors swirled about their whereabouts. So much so, that on May 18, Petro tweeted that the children had been found. He then deleted the message, claiming he had been misinformed by a government agency.
The children told officials they spent some time with the dog, but it then went missing. That was a rescue dog that soldiers took into the jungle. The military was still looking for the dog, a Belgian Shepherd named Wilson, as of Saturday.
Petro said that for a while he had believed the children were rescued by one of the nomadic tribes that still roam the remote area where the plane fell and have little contact with authorities.
As the search progressed, soldiers found small clues that led them to believe the children were still alive, including a pair of footprints, a baby bottle, diapers and pieces of fruit that looked like they had been bitten by humans.
“The jungle saved them,” Petro said. “They are children of the jungle, and now they are also children of Colombia.”
UK
Far right's “anti-science paranoia” a “huge problem” for Keir Starmer
| Andrew Marr | New Statesman
Canadian province faces backlash over changes to sexual orientation policy in schools
By Karen Graham June 11, 2023 The old policy mandated that each school should have at least one gender-neutral washroom. The new policy keeps this line, but specifies that those washrooms should be private.
Source - AxelBoldt (talk · contribs), Public Domain
The New Brunswick government is facing backlash from Ottawa over a new education policy targeting transgender kids.
After weeks of controversy, New Brunswick’s minister of education, Bill Hogan, unveiled three changes to a policy protecting LGBTQ students in schools, including no longer making it mandatory for teachers and staff to respect the chosen names and pronouns of children under 16 without parental consent, according to CBC News https://www.cbc.ca/news/canada/new-brunswick/nb-policy-713-review-hogan-1.6863231
The backlash included Prime Minister Justin Trudeau, who accused Blaine Higgs’s government of targeting transgender kids. The premier also faced opposition from his own caucus.
On Thursday, eight Progressive Conservative members, including six cabinet ministers, sat out question period and other legislative business to protest the changes, reports Global News https://globalnews.ca/news/9758359/nb-blaine-higgs-lgbtq-policy-713-backlash/ In a statement, they expressed “extreme disappointment in a lack of process and transparency” in the policy’s review.
Later, on Thursday night, Trudeau spoke at a fundraiser for the LGBTQ charity Rainbow Railroad in Toronto, saying “Trans kids need to feel safe, not targeted by politicians.”
“We’re seeing that angry, hateful rhetoric rise on our continent, particularly targeting trans people,” he said. “Far-right political actors are trying to outdo themselves with the types of cruelty and isolation they can inflict on these already vulnerable people. Right now, trans kids in New Brunswick are being told they don’t have the right to be their true selves, that they need to ask permission.”
The former policy, which dated from 2020, said teachers must respect all children’s chosen names and pronouns, regardless of age, and that it should be up to the student whether their parents were informed.
Starting on July 1, children under the age of 16 must have parental consent to alter their names and pronouns at school.
Under the new policy, it now says if a child doesn’t consent to involving parents, they should be referred to social workers or a mental health professional.
“We have no intention of telling parents about a child’s gender identity if they don’t wish us to do so. We’re going to encourage them to speak with supportive professionals if they wish, and that’s how we’re going to proceed,” Hogan said.
Another change to the policy removes a reference to students being allowed to participate in activities “consistent with their gender identity”. There is also a new requirement that gender-neutral washrooms be private.
Smart colour-changing active materials inspired by cephalopods
June 10, 2023 Amici direct vision prism. Image by D-Kuru. CC BY-SA 3.0
Researchers have constructed new smart colour-changing active materials. These are based on an assessment of the natural world, with the findings incorporated into modern technologies.
Physical chemists from the University of Hong Kong have been examining photochromic active colloids with a view to building new smart active materials. For inspiration, the researchers have examined the skin of cephalopods (animals with tentacles attached to the head) and their camouflage ability.
The skin of cephalopods, such as a squid, octopus, cuttlefish, or nautilus, contains pigment groups that can sense changes in environmental light conditions and adjust their appearance through the action of pigment cells.
This colour-changing ability is based on a mechanical mechanism where pigment particles are folded or unfolded under the control of radial muscles. Taking this concept, the scientists formed dynamic photochromic nanoclusters by mixing cyan, magenta and yellow microbeads, achieving photochromism on a macro scale.
To achieve this, the researchers developed a novel wavelength-selective intelligent colloid system that can achieve light-controlled multi-dimensional phase segregation. The resultant macroscopic photochromism relies on light-induced vertical phase stratification in the active microbead mixture.
This leads to the enrichment of coloured microbeads corresponding to the incident spectrum. The process relies on rearranging existing pigments which makes it more reliable and programmable.
In terms of future applications, the technology can be used for developing electronic ink, displays, and active optical camouflage. Electronic ink can be turned into a film and then integrated into electronic displays, enabling novel applications in phones, watches, magazines, wearables and e-readers.
The research output was as a novel photoresponsive ink, created by mixing microbeads with different photo-sensitivity as applied to electronic paper. The principle is similar to the pigment clusters in the skin of cephalopods that can sense the light condition of the environment and change the appearance of surrounding pigment cells through their corresponding actions.
A related objectives was to develop medical micro/nanorobots based on these particles for drug delivery and non-invasive surgery. Here, light-powered microswimmers could function as a type of self-actuated active particles, developed for the purpose of creating controllable nanorobot.
The research appears in the journal Nature, titled “Photochromism from wavelength-selective colloidal phase segregation.”
UBS set to carve up Credit Suisse after takeover day
UBS is set to get even bigger when it absorbs its rival Credit Suisse on Monday, but the merger presents challenges
- Copyright AFP/File Daniel LEAL
Nathalie OLOF-ORS
UBS is set to finalise the takeover of Credit Suisse on Monday, but the hardest part is yet to come: turning the arranged marriage of Switzerland’s biggest banks into a success.
Reassuring the financial markets, customers, employees, the government and the public remains a challenge once the mega-merger is completed.
“From Monday onwards, UBS can start being proactive,” Andreas Venditti, an analyst at Swiss investment manager Vontobel, told AFP.
Switzerland’s largest bank must already have an idea of what bits of Credit Suisse it wants to keep, close or sell, but “so far they were limited in what they could do,” he said.
On June 5, the two Zurich-based banks announced that the merger should be completed on June 12.
A merger this complex could turn out to be a nightmare, particularly given how little time UBS has had.
UBS expects an exceptional accounting gain of nearly $35 billion due to the difference between the purchase price and the recognised net assets of Credit Suisse.
UBS chief executive Sergio Ermotti has warned the coming months will be “bumpy” for the bank.
Takeover preparations have already brought “a first wave” of emotions and difficult decisions, but “other waves” are still to come, he told the Swiss Economic Forum conference in Interlaken on Friday.
He said jobs would be the trickiest part of the merger, adding that cuts were inevitable given the overlap in some activities.
– Shotgun wedding –
Like UBS, Credit Suisse was among 30 international banks deemed too big to fail due to their importance in the global banking architecture.
But the collapse of three US regional lenders in March left Credit Suisse looking vulnerable, and its share price plunged more than 30 percent during trading on March 15.
The Swiss government, the central bank and financial regulators then stepped in and strongarmed UBS into a $3.25 billion takeover announced on Sunday, March 19, before the markets reopened the following day.
The government feared Credit Suisse would have quickly defaulted and triggered a global banking crisis.
The deal includes guarantees for UBS in case there are any nasty surprises in the Credit Suisse cupboards.
UBS and the Swiss government signed the guarantee contract on Friday, which can reach up to nine billion Swiss francs ($9.85 billion), if the losses exceed five billion francs.
The takeover terms and the size of the resulting megabank are causing serious concern in Switzerland.
The parliament in Bern has set up an extremely rare commission of inquiry, with lawmakers set to investigate how the emergency rescue was stitched together in double-quick time. – Questions remain –
Many questions surrounding the merger remain unanswered. Investors want to know more about the integration process and the bits of Credit Suisse that will be kept and absorbed.
Venditti said the picture should be clearer once second-quarter financial results come out. UBS has pushed back the publication date by more than a month to August 31.
He said he hopes UBS will say more about the fate of the profitable domestic retail branch of Credit Suisse, the arm that was untouched by the scandals that dogged the bank.
Ipek Ozkardeskaya, an analyst at Swissquote Bank, said “talent retention” would be one of the biggest challenges, as staff departures multiply in the face of downsizing fears.
She also highlighted the need for “creating a new bank culture” in the merged institution, referring to the string of scandals that tarnished the Credit Suisse brand.
From the political standpoint, the financial regulators FINMA “should make sure to protect competition, which could necessitate an eventual spin-off of certain business units”, Ozkardeskaya told AFP.
The Socialist Party fears the merger will create a “monster” that would be too big to rescue in a crisis — in which case the whole country would be held “hostage”.
The government and the central bank released some 259 billion Swiss francs of liquidity to facilitate the takeover.
“We owe it to the youth of this country to ensure that such a crisis cannot happen again,” Damien Cottier, the parliamentary leader of the centre-right Liberals party, said in the National Council lower chamber on Wednesday.
